FGV Annual Report 2020

Operational Performance In 2020, the Sugar Business saw an 8% increase in sales volume and a 0.5% growth in the average selling price. Production volume fell 6% year-on-year following the cessation of MSM Perlis in June, 2020.This reduction in capacity is to be filled by the new MSM Johor refinery. The business was also affected by a decrease in local demand due to the COVID-19 pandemic. While the utilisation factor declined by 2%, there were improvements in 4Q FY2020 due to capacity consolidation that resulted in lower refining costs. In addition, operational improvements resulted in better yields from refined sugar processing and a reduction in sales and distribution costs. FY2019 FY2020 Variance (%) Sales Volume (MT) 947,290 1,024,603 +8 Production Volume (tonnes) 1,073,888 1,010,215 -6 Utilisation Factor 48 47 -2 OUTLOOK and Prospects • Complete of expansion plans for the value-added facilities in MSM Johor. • Improve MSM Johor’s SKUs to meet domestic demand especially for Coarse Grain Sugar (CGS-P1). • Improve MSM Johor’s production capabilities and efficiency. • Penetrate new markets via direct engagements with reputable players having regional distribution networks, towards increasing sales and utilisation factor of our refineries. • Strategic capital management to improve liquidity. • Continue to improve the overall yield in all our refineries. • Streamline the logistics and supply chain operation for smooth delivery at lower cost. • Further explore downstream into sugar related business unlocking value-added income stream. • Monetise all the non-strategic and non-productive assets. For more details on the Sugar Business, please refer to the MSM Annual Report 2020. 73 Who We Are How We Operate How We Are Governed Additional Information Sustainability Matters Statement & Discussion By Our Leaders